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Open Orphan (ORPH) Shares Climb On Proposed Distribution in Specie

Sam Boughedda
Sam Boughedda trader
Updated 14 Jun 2021

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Open Orphan (LON: ORPH) shares are trading higher on Monday after it announced a proposal to make a distribution in specie of the entire issued share capital of its wholly-owned subsidiary, Orph Pharma IP, to Poolbeg Pharma, in return for the issue of new shares by Poolbeg to Open Orphan shareholders.

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Open Orphan shareholders have already granted approval with shares marked “ex-rights” on 16 June 2021. Shareholders will receive one Poolbeg Share for every 2.98 ordinary shares held in the company.

However, there will be a lock-up period for relevant shareholders who receive Poolbeg shares. They will not be able to sell, transfer or deal in Poolbeg Shares for 9 calendar months.

Croft Nominees Limited will hold the legal title to the Poolbeg shares until the date, which is 9 months from admission. Once the lock-up expires, Croft will then ass the share certificate to Poolbeg’s registrar and will execute the stock transfer forms to the relevant shareholders.

Open Orphan and Poolbeg will also into a demerger agreement as part of the deal.

Open Orphan’s share price is currently trading at 38.05p, up 6.28% following the news. At the open, it jumped as high as 39.5p.

Should you invest in Open Orphan shares?

Open Orphan shares are traded on the London stock exchange’s AIM market (the alternative investment market), which is the submarket specifically for smaller companies. AIM stocks are attractive to investors as they have tax advantages and smaller companies have the potential to benefit from rapid growth. But are Open Orphan shares the best buy? Our stock market analysts regularly review the market and share their picks for high growth companies

Sam Boughedda
Sam is a trader and lead stock market writer at AskTraders. After starting his career in the forex market, Sam now focuses on stocks, specifically consumer staples.